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"Exploring the Digital Marketplace"
By IDC Asia/Pacific Emerging Technologies Research


Feb10
18

The China v. Google standoff: An end to the Chinese consumer myth?

Posted by: Claus Mortensen in WebSpace x.0 @ 12:06 PM

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Claus Mortensen
Google has received much media attention ever since the company announced its plans to stop censoring its search results on google.cn. Until now, because Google is operating its Chinese search site from data centers outside the “Great Firewall of China”, the company has only been allowed to offer search services in China if it agrees to censor the search results according to the Chinese governments’ directions.  Even so, access to Google’s China site has been blocked in the past – most recently, under the pretext of Google not properly blocking pornography on its Google.cn site. Recent hacking attacks on the Gmail accounts of Chinese human rights activists, attacks that allegedly originated from China, seem to have been the last straw for the company, and prompted it to review its business operations in China. In what appears to be an ultimatum to the Chinese government, Google announced that it would no longer censor its search results, although the company would seek to discuss how it “could operate an unfiltered search engine within the law, if at all”.

Clearly, the Chinese government does not take kindly to ultimatums, and consequently, the only possible outcome appears to be for Google to exit the Chinese market. This is certainly a surprise move by Google, seeing that the company has fought hard and long to establish itself in the China Internet search market. It has clearly not been easy for Google since it started its China operations in 2005, although it has managed to steadily gain market share against other domestic search engines. By the end of 2009, Google had captured approximately 30% of the market, with leading search engine Baidu at about 65%. Although Google is not used to being second in many markets, the position appeared promising.  So the decision to pull out of China is certainly surprising. It defies conventional wisdom that has been telling us for the last five years that China is a market that every large brand must be in, a market that will fuel growth as mature markets stagnate, and a market that will outspend all of us by 2020. But the numbers seem pretty clear: despite all of Google’s investments, hard work and determination in China, 30% market share only translated into perhaps as little as US$200 million revenue in 2009 (this is what most analysts estimate as Google does not specify the revenue in its annual results). Comparing this to the company’s overall annual revenue of US$23,650 million gives a sense of perspective – less than a percent of the overall revenue appears to be attributable to the Chinese market.

The problem for Google is that, the allure of the Chinese market may have been true if you’re a luxury consumer goods brand, a premium Cognac or, if you’re producing cars. But for many other non-Chinese brands and services, China remains elusive – especially when it comes to Internet and media. China undoubtedly has been, and probably will remain for some time, a major driver of growth and a major accumulator of wealth. But, unlike the U.S., it's just not consumer-driven growth. While China may be an economic tiger, the country's consumer market is still a cub, relatively speaking.  And it’s a cub that still appears out of reach for most foreign companies.

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Aug09
20

Web 2.0 is dead: Long live Advanced Customer Care and Retention

Posted by: Claus Mortensen in WebSpace x.0 @ 4:49 PM

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Claus Mortensen

Although the term was reportedly first mentioned back in 1999, Web 2.0 really became part of the global agenda in 2004. Since then, Web 2.0 has been one of the most talked about phenomena in the industry – especially in the last two to three years. And still, most companies are still struggling with how to grasp this phenomenon. Many, if not most, are still asking themselves how they can take advantage of Web 2.0 and turn this "thing" into something that can benefit their business.

And the common denominator for most is this: they are asking the questions – but they still haven't found the answer.

So – it's been more than five years since Web 2.0 and "social media" appeared on the agenda, and in those five years only very few companies have been able to make any real use of it. In the world of technology, five years is a life span these days. In the world of technology, something that fails to mature or produce tangible solutions and products in five years would most often be called a "fad" or a "flop" or a "failure". Arguably, Web 2.0 is not about technology – indeed this is one of the key misconceptions attached to the term – but regardless, five years is a long time for a term to stay alive if only so very few are able to make a buck on it.

Without any tangible benefits in the past five years for the majority, we have arrived at a junction where it makes sense to declare:

WEB 2.0 IS DEAD

If Web 2.0 is no more, that would leave us all with a sense of emptiness and an eagerness to fill this void by focusing on what's next. And, luckily for all of us, there is no reason for despair. The old "king" may be dead – but a new one is ready to take its place:

LONG LIVE ACCR

Today's economic climate has highlighted the need for good Customer Care to the extent that many companies now think of it as not only a key differentiator between companies but as an invaluable tool to capture new markets and new customers. Fortunately, new technology is transforming the way Customer Care can be provisioned. New ways to apply customer analytics, virtual call centers, multiple modes of communication, Web 2.0 and virtual worlds are changing how companies reach new customers and keep existing customers engaged. IDC refers to these new tools as "Advanced Customer Care and Retention" or ACCR.

The observant reader would have noticed that I just mentioned Web 2.0 as part of ACCR. And consequently, I'd be contradicting myself – for if the former were dead, then how could it be part of the latter? (The not too observant reader might have noticed also. The declaration was in all capital letters after all).

And you'd be quite right in saying that. In fact, I take it back: Web 2.0 is not dead. It has merely evolved into something that companies around the globe can finally understand: one of many tools that enable businesses to achieve goals. And a very important tool too. In the case of ACCR, Web 2.0 and social media become tools that enable businesses to listen to and engage with their customers. Businesses should do exactly the same using other means such as face-to-face conversations, good use of IP Contact Centers and so forth – but Web 2.0 enables customer engagement on a much larger scale than ever before.

So, again – I take it back. Web 2.0 is not dead but is evolving into something truly useful for businesses. With ACCR, it's fast becoming a cornerstone of Customer Care and will eventually take center stage in many other vital areas within businesses.

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Jun09
18

Google, Microsoft address their shortcomings

Posted by: Claus Mortensen in WebSpace x.0 @ 11:13 AM

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Claus Mortensen
The last few weeks saw two announcements from two giants in the ITC industry: Google and Microsoft. In fact, within a day of each other, Google presented its concept of a Web-based communications platform called "Google Wave" and Microsoft followed suit by announcing the revamp and rebranding of its Live Search into "Bing".

So why do I say that these announcements are addressing the shortcomings of these companies? Well, as far as Microsoft goes, the answers are pretty straightforward. Live Search never really caught on as a search engine, and it has clearly been a strategic disadvantage for the company that it has not been able to rival the global search engine market shares of Google, Yahoo and regional shares of Baidu and others. Bing is clearly designed to change that. Not only has Microsoft changed the name and the design of the search interface - it is also supposedly a move towards a more semantic search engine that seeks to give answers to questions posed by the user rather than just providing a series of links as search results. The idea is not new. At the beginning of this year, Ask.com announced they would focus on this technology and Microsoft itself implemented limited semantic search functionality in its Live Search. And of course, Google has not been resting on its search laurels; the search giant claims to have already implemented semantic search in at least 37 different languages.

So will Bing be successful in addressing Microsoft's shortcomings? Only time can tell. Microsoft would probably be the first company to agree that it is easier said than done to get a real foothold in the Internet search market, but the launch of Bing certainly shows the company's dedication to this space.

Google's shortcomings are not in relation to Internet search, of course, and in fact, Google Wave has little or nothing to do with search. Wave is the company's vision of how people will and should be communicating in the future. It incorporates email, instant messaging, real-time transmissions of what is typed, multimedia integration, games integration, and others, in an interface that looks suspiciously like well... Facebook. And that is perhaps what is at the crux of it all. Even though it is touted as a new communications platform, it is perhaps really Google's way of addressing the company's major shortcoming: the lack of a social networking platform to rival those of Facebook, Friendster and others.

So will Wave succeed in addressing Google's shortcomings? Again, only time can tell. There is plenty of anecdotal evidence to suggest that social network services are encroaching fast on "traditional" email and instant messaging services. And they are fast becoming a platform of choice for sharing multimedia as well. So undoubtedly, Google is seeing the strategic importance of hitting back and coming up with viable alternatives to "traditional" social networking.

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